Options update: Cadbury volatility low into uncertainty of Kraft's interest at higher price

Posted Dec 1st 2009 8:00AM by Paul Foster
Filed under: Options, Kraft Foods'A' (KFT)

Cadbury PLC (CBY) closed at $53.37. Cadbury, the world's second largest confectioner, rejected Kraft's (KFT) buyout bid on Nov. 9. CBY December option implied volatility is at 26, March is at 23, versus its 26-week average of 29, according to Track Data, suggesting decreasing price movement.

ishares NASDAQ Biotechnology Index (IBB) closed at $78.41. IBB December and January call volatility is at 19, puts are at 22, versus its 26-week average of 23, according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Tags: Cadbury PLC, CadburyPlc, ishares NASDAQ Biotechnology Index, IsharesNasdaqBiotechnologyIndex, option implied volatility, OptionImpliedVolatility